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RNS
Cardiff Property PLC   -  CDFF   

Final Results

Released 07:00 27-Nov-2019

RNS Number : 7595U
Cardiff Property PLC
27 November 2019
 

THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY

AND ITS SUBSIDIARIES

LEI: 213800GE3FA4C52C1N05

 

 

 

FOR RELEASE                           7.00 AM                                    27 November 2019

 

THE CARDIFF PROPERTY PLC

(The group, including Campmoss, specialises in property investment and development in the Thames Valley. The total portfolio including the jointly controlled Campmoss investment and development portfolio, valued in excess of £30m, is primarily located to the west of London, close to Heathrow Airport and in Surrey and Berkshire.)

 

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2019

 

 

 

Highlights:

 


 

2019

2018

Net Assets

£'000

28,343

27,290

Net Assets Per Share

£

22.85

21.78

Profit Before Tax

£'000

1,653

1,114

Earnings Per Share - Basic and diluted

pence

123.1

80.6

Dividend Per Share

pence

17.1

16.6

Gearing

%

Nil

Nil

 

 

 

 


Richard Wollenberg, Chairman, commented:

 

"The uncertain environment fuelled by political and economic turbulence has stalled activity in the Thames Valley commercial property market.

 

During the year office lettings remained at a low level and as a consequence rental levels have marginally declined. Office and retail rents have marginally declined, whilst business units incorporating a high proportion of industrial space have proved far more resilient with minor increases in rent being achieved. Consequently, both developers and investors have been reluctant to commit towards new commercial property schemes and until confidence returns this position is likely to continue.

 

The commercial property investment market remains active with investors in search of secure income as interest rates remain low."

 

For further information:

 

The Cardiff Property plc

Richard Wollenberg

01784 437444

Shore Capital

       Patrick Castle

020 7468 7923



THE CARDIFF PROPERTY PUBLIC LIMITED COMPANY

AND ITS SUBSIDIARIES

 

 

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2019

 

Chairman's Statement and Property Review

 

 

Dear Shareholder,

 

The uncertain environment fuelled by political and economic turbulence has stalled activity in the Thames Valley commercial property market.

 

During the year office lettings remained at a low level and as a consequence rental levels have marginally declined. Office and retail rents have marginally declined, whilst business units incorporating a high proportion of industrial space have proved far more resilient with minor increases in rent being achieved. Consequently, both developers and investors have been reluctant to commit towards new commercial property schemes and until confidence returns this position is likely to continue.

 

The commercial property investment market remains active with investors in search of secure income as interest rates remain low.

 

The Thames Valley retail market continues to be under pressure as retailers face increasing competition from internet-based users and the resultant change in shopping habits and delivery of goods and food. It is encouraging to note that certain towns are reporting an increase in footfall following investment in their infrastructure and retail environment. This is particularly relevant to our assets in Maidenhead and Bracknell.

 

Sales of new homes in the Thames Valley have suffered from a general lack of confidence in the market despite being supported by the ongoing availability of government initiatives, including Help to Buy and low interest rates. The situation may well change for the better once uncertainty is out of the way as the supply imbalance is still evident and consumer demand needs to be satisfied. Enquiries for new residential lettings are reasonably active with rents remaining unchanged.

 

FINANCIAL

For the year to 30 September 2019, the group's profit before tax was £1.65m (2018: £1.11m). This figure includes a revaluation increase of £0.022m (2018: £0.025m) for the group and a profit of £0.90m (2019: £0.34m) in respect of our post tax profit and pre-dividend share of Campmoss Property Company Limited, our 47.62% owned joint venture. During the current year Campmoss Property paid a dividend of which Cardiff's share was £0.5m.

 

Revenue for the year which represented gross rental income, excluding Campmoss, totalled £0.65m (2018: £0.65m).

 

The profit after tax attributable to shareholders for the financial year was £1.54m (2018: £1.01m) and the earnings per share was 123.1p (2018: 80.6p).

 

At the year-end, the Company's commercial and residential portfolio was valued by Kempton Carr Croft and Nevin & Wells, totalling £5.96m (2018: £5.93m). This value excludes own use freehold property, which is included under property, plant and equipment in the balance sheet and held at valuation.

 

 

Property when completed and held for re-sale is held as stock at the lower of cost or net realisable value. At the year-end this represented commercial property at The Windsor Business Centre.

 

 

 

The group's total property portfolio, including the Campmoss investment and development portfolio, was valued at £30.0m (2018: £26.8m). The company's share of the net assets of Campmoss was £15.6m (2018: £15.2m). During the year Campmoss was successful in receiving two planning approvals which have contributed to the uplift in the carrying value of this investment.

 

The group's net assets as at the year-end were £28.34m (2018: £27.29m) equivalent to £22.85 per share (2018: £21.78) an increase of 4.9% over the year (2018: 2.5%). The group, including Campmoss, has adequate financial facilities and resources to complete works in progress and the proposed development programme. Cash balances are held on short term deposit. At the year-end the company had nil gearing (2018: nil). During the year the company purchased and cancelled 12,567 (2018: 10,809) ordinary shares at a total cost of £220,062 (2018: £194,175).

 

The company may hold in treasury any of its own shares purchased. This gives the company the ability to reissue treasury shares and provides greater flexibility in the management of its capital base. Any shares purchased by the company not held in treasury will be cancelled and the number of shares in issue reduced accordingly. The company intends to continue its policy of purchasing its own shares, whether to be held in treasury or to be cancelled, and a resolution renewing the directors' authority will be placed before the forthcoming Annual General Meeting on 16 January 2020. This authority will only be exercised in circumstances where the directors regard such purchases to be in the best interests of shareholders as a whole and is subject to the waiver under Rule 9 of the Takeover Code being approved by shareholders as set out in the document accompanying this report. Full details of the Rule 9 Waiver are set out in the document accompanying this report and are also available on the company's website www.cardiff-property.com.

 

Current IFRS accounting recommends that deferred tax is chargeable on the difference between the indexed cost of properties and quoted investments and their current market value. However, IFRS accounting does not require the same treatment in respect of the group's unquoted investment in Campmoss Property, our 47.62% owned joint venture. The investment in Campmoss is a substantial part of the company's net assets and, for indicative purposes, a disposal of this investment based on the value in the company's balance sheet at the year-end would realise a tax liability of £2.65m (2018: £2.58m) equivalent to £2.14 (2018: £2.06) per share calculated using a tax rate of 17%. This information is provided to shareholders as an additional non-statutory disclosure.

 

DIVIDEND

The directors recommend a final dividend of 12.5p per share (2018: 12.2p) making a total dividend for the year of 17.1p (2018: 16.6p). an increase of 3.0%. The final dividend will be paid on 14 February 2020 to shareholders on the register at 24 January 2020.

 

THE PROPERTY PORTFOLIO

The group continues to concentrate its property activities in the Thames Valley, primarily west of London, close to Heathrow Airport, and in Surrey and Berkshire.

 

The group's property portfolio is predominantly let. During the year Cardiff negotiated a number of new leases achieving a small overall rental increase and furthered its development plans for property in Windsor and Cardiff. Campmoss completed the development of commercial and residential units at Alston House, Bracknell and achieved two important planning permissions at Britannia Wharf, Woking and Clivemont House, Maidenhead, details of which are included in the strategic report. The group is well placed to take advantage of any upturn in the property market and to react quickly to opportunities as they arise.

 

QUOTED INVESTMENTS

The company retains a small portfolio of quoted retail bonds and equity investments the former providing an attractive medium-term income stream. The value of the portfolio has marginally decreased over the year and is in excess of original cost. The equity investments include Galileo Resources plc and Aquila Services Group plc, I remain as a non-executive director of both.

 

RELATIONSHIP AGREEMENT

The company has entered into a written and legally binding relationship agreement with myself, its controlling shareholder, to address the requirements of LR9.2.2AD of the Listing Rules.

 

MANAGEMENT AND TEAM

The group's small management team and joint venture partner have been extremely busy over the year and I wish to take this opportunity to thank them for their support and achievements over the year. The intensive day to day management of the group's portfolio remains essential in achieving continued success.

 

OUTLOOK

The group's assets are located in prime Thames Valley locations which should benefit from a return of confidence in the market. The next few months will hopefully allow current political and economic uncertainties to be unravelled and encourage industry and the property market to move positively forward. 

 

I therefore look forward to reporting to you further at the half year.

 

 

J. Richard Wollenberg

Chairman

 

26 November 2019

 

 



Consolidated Income Statement

FOR THE YEAR ENDED 30 SEPTEMBER 2019

 

 

 

2019

2018

 

 

 

£'000

£'000

 

 

 

 

 

Revenue

 

 

647

650

Cost of sales

 

 

(70)

(30)

 

 

 

              

              

Gross profit

 

 

577

620

Administrative expenses

 

 

(488)

(536)

Other operating income

 

 

577

671

 

 

 

              

              

Operating profit before gains on investment

   properties and other properties

 

 


666


755

Surplus/(deficit) on revaluation of investment properties

 

 

22

(25)

 

 

 

              

              

Operating profit

 

 

688

730

Financial income

 

 

61

48

Share of profit of joint venture

 

 

904

336

 

 

 

              

              

Profit before taxation

 

 

1,653

1,114

Taxation

 

 

(117)

(101)

 

 

 

              

              

Profit for the financial year attributable to equity

    holders

 

 

 

1,536

 

1,013

 

 

 

              

              

 

 

Earnings per share on profit for the

 

 

 

 

   financial year - pence

 

 

 

 

Basic and diluted

 

 

123.1

80.6

 

 

 

              

              

 

 

Dividends

 

 

 

 

Final 2018 paid 12.2p (2017: 11.5p)

 

 

153

145

Interim 2019 paid 4.6p (2018: 4.4p)

 

 

57

55

 

 

 

              

              

 

 

 

210

200

 

 

 

              

              

Final 2019 proposed 12.5p (2018: 12.2p)

 

 

155

153

 

 

 

              

              

These results relate entirely to continuing operations. There were no acquisitions or disposals in either year.

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of comprehensive income and expense

FOR THE YEAR ENDED 30 SEPTEMBER 2019

 

 







2019

2018



£'000

£'000





Profit for the financial year


1,536

1,013



                

                

Items that may be reclassified subsequently to profit or loss




Net change in fair value of available for sale financial assets


(43)

(185)

Net change in fair value of other properties


(10)

(4)



                

                

Total comprehensive income and expense for the year

  attributable to the equity holders of the parent company


 

1,483

 

824



                

                


 

 

 



Consolidated Balance Sheet

AT 30 SEPTEMBER 2019



              2019

                2018    



£'000

£'000

£'000

£'000

Non-current assets






Freehold investment properties



5,995


5,927

Property, plant and equipment



284


298

Investment in joint venture



15,604


15,200

Other financial assets



843


886




               


               




22,726


22,311







Current assets






Inventory and work in progress


674


672


Trade and other receivables


139


142


Held to maturity cash deposits


3,084


200


Cash and cash equivalents


2,473


4,718




               


6,370

               

 

5,732




               


               

Total assets



29,096


28,043




               


               

Current liabilities






Trade and other payables


(528)


(498)


Corporation tax


(131)


(147)




               


               

 



Non-current liabilities



(659)


(645)

Deferred tax liability



(94)


(108)




               


               

Total liabilities



(753)


(753)




               


               

Net assets



28,343


27,290




                


                

Equity






Called up share capital



248


251

Share premium account



5,076


5,076

Other reserves



2,535


2,585

Investment property revaluation reserve



1,814


827

Retained earnings



18,670


18,551




                


                

Total equity




28,343


 

27,290




                


                







Net assets per share



£22.85


£21.78




                


                







 



Consolidated Cash Flow Statement

FOR THE YEAR ENDED 30 SEPTEMBER 2019

 

 

 

2019
£'000

2018
£'000

Cash flows from operating activities

 

 

 

   Profit for the year

 

1,536

1,013

   Adjustments for:

 

 

 

      Depreciation

 

5

5

      Financial income

 

(61)

(48)

      Share of profit of joint venture

 

(904)

(336)

      Fair value movement on revaluation of investment properties

 

(22)

25

      Taxation

 

117

101

 

 

                

                

Cash flows from operations before changes in working capital

 

671

760

Acquisition of inventory and work in progress

 

(2)

-

  Decrease/(increase) in trade and other receivables

 

4

(51)

  Increase/(decrease) in trade and other payables

 

30

(19)

 

 

                

                

Cash generated from operations

 

703

690

   Tax paid

 

(147)

(112)

 

 

                

                

Net cash flows from operating activities

 

556

578

 

 

                

                

 

 

 

 

Cash flows from investing activities

 

 

 

   Interest received

 

62

47

Dividend from joint venture

 

500

-

   Acquisition of investments, investment property, and plant and equipment

 

(49)

(168)

    (Increase)/decrease in held to maturity deposits

 

(2,884)

1,170

 

 

                

                

Net cash flows from investing activities

 

(2,371)

1,049

 

 

                

                

 

 

 

 

Cash flows from financing activities

 

 

 

   Purchase of own shares

 

(220)

(194)

   Dividends paid

 

(210)

(200)

 

 

                

                

Net cash flows (used in)/from financing activities

 

(430)

(394)

 

 

                

                

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(2,245)

1,233

   Cash and cash equivalents at beginning of year

 

4,718

3,485

 

 

                

                

Cash and cash equivalents at end of year

 

2,473

4,718

 

 

                

                



 

Consolidated statement of changes in equity

FOR THE YEAR ENDED 30 SEPTEMBER 2019

Consolidated statement of changes in equity

 

 

 

 

 

 

 

Share
capital

 

 

    £'000

Share
premium
account

 

£'000

Other
reserves

 

 

£'000

Investment
property
revaluation
reserve

    £'000

Retained
earnings

 

 

£'000

Total
equity

 

 

£'000

At 1 October 2017

253

5,076

2,772

997

17,762

26,860

Profit for the year

-

-

-

-

1,013

1,013

Other comprehensive income - revaluation of investments

   net change in fair value of own use freehold property


-
-


-
-


(185)
(4)


-
-


-
-


(185)
(4)

 

Transactions with equity holders







Dividends

-

-

-

-

(200)

(200)

Purchase of own shares

(2)

-

2

-

(194)

(194)


                

                

               

                

                

               

Total transactions with equity holders

(2)

-

2

-

(394)

(394)


                

                

               

                

                

               

Transfer on revaluation of investment properties - Cardiff


-


-


-


(25)


25


-

Transfer on revaluation of investment properties - Campmoss


-


-


-

(145)

145

-


                

                

               

                

                

               

At 30 September 2018 and
1 October 2018

251

5,076

2,585

827

18,551

27,290

Profit for the year

-

-

-

-

1,536

1,536

Other comprehensive income - revaluation of investments

net change in fair value of own use freehold property


-
-


-
-


(43)
(10)


-
-


-
-


(43)
(10)

 







 

Transactions with equity holders








Dividends

-

-

-

-

(210)

(210)

Purchase of own shares

(3)

-

3

-

(220)

(220)


                

                

               

                

                

               

Total transactions with equity holders

(3)

-

3

-

(430)

(430)


                

                

                

                

                

                








Transfer on revaluation of investment properties - Cardiff

-

-

-

22

(22)

-

Transfer on revaluation of investment properties - Campmoss

-

-

-

965

(965)

-


             

                

                

            

                

                

At 30 September 2019

248

5,076

2,535

1,814

18,670

28,343

 








______

______

______

______

______

___   ___

 

 

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2019

 

1.     Basis of preparation

 

The consolidated results for the year ended 30 September 2019 and 2018 are prepared by the group under applicable International Financial Reporting Standards adopted by the EU ("adopted IFRS") and applicable law.

 

The financial information set out above does not constitute the company's statutory financial statements for the years ended 30 September 2019 or 30 September 2018 but is derived from those financial statements. Statutory financial statements for 2018 have been delivered to the Registrar of Companies and those for 2019 will be delivered in due course. The auditor has reported on those financial statements; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the financial statements for 2018 nor 2019.

 

Going concern

 

The group has sufficient financial resources to enable it to continue to trade and to complete the current maintenance and development programme. As a consequence, the directors believe that the group is well placed to manage its business risks successfully despite the current uncertain economic outlook.

After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements.

 

New, revised or changes to existing financial reporting standards

 

Subject to the adoption of the IFRS's available for application noted below, this announcement is prepared on the basis of the accounting policies as set out in the most recently published set of annual financial statements.

 

IFRS

The group has adopted IFRS 9 - Financial Instruments and IFRS 15 - Revenue from contracts with customers for the year ended 30 September 2019. These standards were applied using the modified retrospective approach. 

 

IFRS 9 did not result in any measurement changes and did not result in the recognition of any additional credit losses. The group elected to present in other comprehensive income subsequent changes in the fair value of certain equity investments.

 

IFRS 15 combines several previous standards and sets out a five step model for the recognition of revenue and establishing principles for reporting useful information to users of financial statements about the nature, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers.  IFRS 15 does not apply to rental income or ground rent, which is in the scope of IFRS 16 - Leases, but does apply to service charge income, management fees and trading property disposals. The changes introduced by IFRS 15 have not had a quantative impact on the consolidated financial statements of the group.

 

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective for the current accounting period.  None are expected to have a material impact on the consolidated financial statements of the group, 

 

IFRS 16 Leases (Effective date 1 January 2019) is effective for the next financial year.  IFRS 16 removes the distinction between operating and financial leases, which for lessees will result in almost all operating leases being brought on balance sheet.  The accounting for lessors, which is applicable to the group, will however not significantly change and the impact of the consolidated results will be immaterial.

 

As a lessor the main impact will be additional qualitative disclosures about the groups leasing arrangements.

 

 

 

 

 

 

Notes to the Financial Statements

FOR THE YEAR ENDED 30 SEPTEMBER 2019 (continued)

 

2.     Segmental analysis

 

The group manages its operations in two segments, being property and other investment and property development. The results of these segments are regularly reviewed by the board as a basis for the allocation of resources, in conjunction with individual site investment appraisals, and to assess their performance. Information regarding the results and net operating assets for each reportable segment are set out below:


2019

2018


£'000

£'000

Revenue (wholly in the United Kingdom):



   Property and other investment being gross rents receivable

647

650


              

              

Profit before taxation:



   Property and other investment

1,462

416

   Property development

191

698


              

              


1,653

1,114


              

              

Net operating assets:



   Assets



      Property and other investment

26,600

26,719

      Property development

4,486

4,335

      Eliminations

(1,990)

(3,011)


                

                

Total assets

29,906

28,043


                

                

   Liabilities



      Property and other investment

(2,498)

(3,524)

      Property development

(245)

(240)

      Eliminations

1,990

3,011


                

                

Total liabilities

(753)

(753)


                

                

Net operating assets

28,343

27,290


                

                

Of the group's share of the profit in its joint venture of £904,000 (2018: £336,000), £11,000 (2018: £498,000) relates to property development and a profit of £893,000 (2018: loss £162,000) relates to property investment. The interest income of £58,000 (2018: £48,000) relates entirely to property investment. Of the income tax expense of £1,000 (2018: income £21,000), £1,000 (2018: £21,000) relates to property investment and £nil (2018: £nil) to property development. Due to the reportable segments being accounted for in separate legal entities it is possible to directly allocate the group results and net assets to the reportable segments.

"Eliminations" relate to inter segment transactions and balances which cannot be specifically allocated but are eliminated on consolidation.

 

3. Earnings per share

 

Earnings per share has been calculated in accordance with IAS 33 - Earnings Per Share using the profit after tax for the financial year of £1,536,000 (2018: £1,013,000) and the weighted average number of shares as follows:

 

Weighted average

number of shares

 

2019

 2018

 

 

 

Basic and diluted basis

1,247,277

1,258,139

 

 

                 

                

 

 

 

Financial Calendar

 

 

2019

27 November

Final results for 2019 announced

2020

16 January

Annual General Meeting/General Meeting


23 January

Ex-dividend date for the final dividend


24 January

Record date for the final dividend


14 February

Final dividend to be paid


May

Interim results for 2019 to be announced


July

Interim dividend for 2019 to be paid


30 September

Year end

 

 

 

 

Directors and Advisers

 

 

Directors

Auditor

J Richard Wollenberg

Crowe U.K. LLP

Chairman and chief executive




Karen L Chandler FCA


Finance director

Stockbrokers and financial adviser


Shore Capital

Nigel D Jamieson BSc, FCSI


Independent non-executive director




Secretary

Bankers

Karen L Chandler FCA

HSBC Bank Plc





Non-executive director of wholly owned subsidiary

Solicitors

First Choice Estates plc
Derek M Joseph BCom, FCIS

Blake Morgan LLP

Charsley Harrison

 

 

Head office

Registrar and transfer office

56 Station Road

Neville Registrars Ltd

Egham

Neville House

Surrey TW20 9LF

Steelpark Road

Telephone: 01784 437444

Halesowen

Fax: 01784 439157

B62 8HD

E-mail: webmaster@cardiff-property.com

Telephone: 0121 585 1131

Web: www.cardiff-property.com


 


 


Registered office

Registered number

56 Station Road

00022705

Egham


Surrey TW20 9LF






 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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